Genzyme boosts Sanofi earnings

30.04.2012 - The acquisition of Genzyme shows its benefits: Sanofi reported strong
sales and earnings growth in the first quarter of 2012.

Paris – The French drug maker reported a net profit of €1.8bn, up from €1.2bn in the first quarter of 2011. The better earnings, however, were not enough to change the company's gloomy outlook for the coming year. The executives warned that earnings in the rest of the year would be hit by the loss of US market exclusivity of its blood thinner Plavix (clopidogrel) in May, and blood pressure drug Avapro (irbesartan) at the end of March. Net sales rose more than 9% to €8.5bn, with revenue at the flagship pharmaceutical division, increasing 8.8% at constant exchange rates, to €7.32bn.

Genzyme contributed €841m. Sanofi benefited from growth in emerging markets (+9.9% to €2.6bn), with Brazil, Russia, Indian and China together contributing €917m. Sanofi's diabetes franchise also increased by 14.4% to €1.3bn. The contribution of Lantus (insulin glargine) is €1.1bn (+17.2%), which means it is the company's top-selling drug. Sanofi's oncology business grew by 12.8% to €741m, with Eloxatin (oxaliplatin) generating €321m in the US.

Sanofi's CEO Chris Viehbacher emphasised that the patent loss of former key products like Plavix and Avapro had been something the French multinational had long foreseen. According to Viehbacher, the company is now entering the final phase of its patent cliff. He said that Sanofi had built six "growth platforms" to replace sales lost to generic competition and generate sustainable growth. He noted that these new products would not be dependent on patents to the same extent. Growth platform businesses include Genzyme developments – including rare disease products like Cerezyme and Fabrazyme, plus the late-stage multiple sclerosis products Aubagio (teriflunomide) and Lemtrada (alemtuzumab). Other growth platforms are diabetes, vaccines, consumer health care, animal health, new products and emerging markets.

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